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The global market for remote medical care or telemedicine is set to reach ~$450B in 2032, up from $84B in 2022, market research and consulting company Emergen Research said in a recent report.
According to Emergen, the global shortage of healthcare workers, technological innovations, and government support will be among the key drivers behind this expansion, which it sets at a compound annual growth rate of ~18%.
Telemedicine took off during the pandemic as social restrictions and favorable regulatory changes encouraged remote interactions between healthcare providers and patients.
From January 2020 to January 2021, major telehealth firms Teladoc Health (NYSE:TDOC) and American Well Corporation (NYSE:AMWL) surged in value, outperforming the broader healthcare sector.
Despite the end of the COVID-19 public health emergency in May, Congress extended certain telehealth flexibilities through the end of 2024.
However, Teladoc Health (TDOC) and Amwell (AMWL) are trading more than 90% lower than their pandemic-era peak in January 2021 as demand for telemedicine ebbed and rivalry intensified, given the industry’s long-term prospects.
In August, TDOC and AMWL shares fell after e-commerce giant Amazon (AMZN) rolled out its virtual health service, Amazon Clinic, nationwide.
In addition to Teladoc (TDOC) and Amwell (AMWL), digital health firms such as GoodRx Holdings (GDRX), Health Catalyst (HCAT), Hims & Hers Health (HIMS), Ontrak (OTRK), and Phreesia (PHR) also operate in telehealth space.
Tech advancements such as artificial intelligence (AI), AI-based electronic health records (EHRs), and augmented reality (AR) are significant tech advancements fueling telehealth expansion.
In July, Teladoc (TDOC) announced an agreement with Microsoft (MSFT) to use the latter’s AI technology to automate clinical documentation taken during virtual clinical exams.
According to Emergen Research, the software segment of the telemedicine market is expected to record the fastest revenue growth during the forecast period, while the services segment is expected to account for the largest revenue contribution.
Meanwhile, the telehome segment is anticipated to record a markedly higher revenue growth over the period, driven by factors such as the aging global population, rising cost of in-person care, and increased access to high-speed internet and mobile devices.
Telemedicine is considered a critical tool to expand equitable access to healthcare, especially in medical fields like psychiatry, cardiology, and infectious disease, to underserved geographies.
At Teladoc (TDOC) in 2022, when overall revenue growth slowed to ~18% YoY from ~86% YoY in 2021, its BetterHelp segment focused on psychiatric care outperformed, adding $1.0B to the topline with ~41% YoY growth.
Geographically, North America is expected to generate the lion’s share of revenue in the global telemedicine market over the forecast period due to competitive advantages amid widespread utilization and historical advancements. In fact, the region made up the largest telemedicine market share of ~40% in 2022 as 76% of U.S. hospitals embraced the technology.
However, Asia Pacific is expected to record the fastest revenue growth over the forecast period, driven by factors such as a shortage of medical professionals, poor healthcare infrastructure, and economic constraints.